The impact of oil prices on stock market development in Pakistan: Evidence with a novel dynamic simulated ARDL approach

2020 ◽  
pp. 101899
Author(s):  
Muhammad Imran Khan ◽  
Jian-Zhou Teng ◽  
Muhammad Kamran Khan ◽  
Arshad Ullah Jadoon ◽  
Muhammad Fayaz Khan
Keyword(s):  
Stock Market ◽  
Oil Prices ◽  
Market Development ◽  
Stock Market Development ◽  
Ardl Approach ◽  
The Impact

scholarly journals BANKING INDUSTRY CONCENTRATION AND NET INTEREST MARGINS (NIMS) IN PAKISTAN

2013 ◽  
Vol 15 (2) ◽  
pp. 384-402 ◽  
Author(s):  
Ijaz Hussain
Keyword(s):  
Stock Market ◽  
Commercial Banks ◽  
Banking Sector ◽  
Operating Cost ◽  
Industry Concentration ◽  
Market Development ◽  
Stock Market Development ◽  
Interest Margins ◽  
The Impact ◽  
Bank Soundness

This paper uses bank level data of 26 commercial banks for the period 2001–2010 to explore determinants of net interest margins of commercial banks of Pakistan. Based on results of this study, past net interest margins, bank soundness, operating cost, industry concentration, relative market share, inflation, real depreciation and industrial growth have statistically significant and positive impact while diversification, change in bank size, lagged liquidity, stock market development have dampening effects on net interest margins. However, impact of ownership, GDP and credit market development is statistically insignificant. Our regression results suggest that stock market development as means of alternative source of finance contributes to reduction in net interest margins while the impact of banking sector development on breaking banking cartels and bringing net interest margins down had been insignificant. Exchange rate adjustments, rate of inflation and growth of the industry also cannot be ignored in management of net interest margins. Incentives for bank executives and managers to ensure efficiency in operating costs, reduction in the premium charged for bank soundness, diversification of bank activities and passing on the scale efficiencies to both depositors and borrowers can also play role to bring interest margins down to accelerate investment and growth in the country.

scholarly journals The impact of stock market development on economic growth: A GMM approach

2021 ◽  
Vol 18 (3) ◽  
pp. 74-81
Author(s):  
Toan Ngoc Bui ◽  
Thu-Trang Thi Doan
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Capital Accumulation ◽  
Developing Economies ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
The Philippines ◽  
Market Development ◽  
Stock Market Development ◽  
The Impact

This study investigated the impact of stock market development (SMD) on economic growth (EG) among emerging markets and developing economies (EMDEs) in Asia. The data sample includes eight Asian EMDEs (China, Indonesia, India, Sri Lanka, Malaysia, the Philippines, Thailand, and Vietnam) from 2008 to 2019. These countries share several similarities, so this ensures reliability of the results. Regarding the analysis, the generalized method of moments (GMM) is used for the estimation. The results show that SMD exerts a positive impact on EG. This finding confirms the importance of SMD in improving efficient capital accumulation and allocation, and also allows investors to reduce risks and increase liquidity, which will boost EG. Further, the significant influence of domestic credit (DC), control of corruption (CC), and inflation (INF) on EG is also highlighted. These findings are valuable empirical evidence that greatly contributes to reinforcing the suitability of classical economic growth theories, especially the theory of endogenous growth. They are also essential to EMDEs in Asia. Accordingly, the EMDEs should develop effective policies to improve the stock market’s scale, which contributes substantially to the development of EG. Moreover, these economies need to pursue many appropriate policies in sync, such as stimulating SMD, improving governance effectiveness and implementing effective macroeconomic policies. Acknowledgment This study was funded by the Industrial University of Ho Chi Minh City (IUH), Vietnam (grant number: 21/1TCNH01).

scholarly journals The Impact of Stock Market Development on Economic Growth: The Case of Botswana

2019 ◽  
Vol 11 (12) ◽  
pp. 149
Author(s):  
Ishmael Radikoko ◽  
Shadreck A. Mutobo ◽  
Mphoeng Mphoeng
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Market Development ◽  
Series Data ◽  
Strong Positive Correlation ◽  
Stock Market Development ◽  
Market Capitalization ◽  
Turnover Ratio ◽  
The Government ◽  
The Impact

This study examines the impacts of the stock market development on economic growth using Botswana as a case study. The study uses times series data covering a decade from 2006 to 2016. The method of analysis used is the Auto regressive distributed lag (ARDL) bounds model. The stock market capitalization ratio (MCR) was used as a proxy for market size while value of shares traded ratio (ST) and Turnover ratio (TR) were used as a proxy for liquidity, collectively representing stock market development. Real gross domestic product (GDP) growth rate was used to represent economic growth .The results show that market capitalization and turnover ratio have a negative correlation with economic growth, while the value of shares traded has a strong positive correlation with economic growth. This result implies that liquidity has propensity to stimulate economic growth in Botswana. The results of this study also found that there exists no causality relationship between stock market development and economic growth. The government should make policies that boost the interest of domestic investors in Botswana as this might spur investors’ interest and boost stock market activity which will improve liquidity and therefore stimulate economic growth.

scholarly journals Reviewing the Equilibrium and Causal Relationships between Stock Market Development and Economic Growth in Jordan

2019 ◽  
Vol 11 (12) ◽  
pp. 37
Author(s):  
Eyad M. Malkawi
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Developing Economies ◽  
Market Development ◽  
Causal Relationships ◽  
Stock Market Development ◽  
Ardl Approach ◽  
Show Evidence ◽  
The Relationship

The relationship between stock market development and economic growth has been diversely investigated by many researchers. This paper investigates the equilibrium and causal relationships between stock market development and economic growth in Jordan for the 1980-2018 period. It employs the ARDL approach and the results show evidence of a co-integration and causal relationships between variables. These results are broadly consistent with similar studies carried out for other developing economies.

scholarly journals The Impact of Second Generation FDI Reforms on the Stock Market Development in India

2019 ◽  
Vol 8 (3) ◽  
pp. 8080-8087
Keyword(s):  
Foreign Direct Investment ◽  
Standard Deviation ◽  
Stock Market ◽  
Direct Investment ◽  
Structural Breaks ◽  
Second Generation ◽  
Terms Of Trade ◽  
Market Development ◽  
Stock Market Development ◽  
The Impact

The Governments took a series of initiatives as a measure of second-generation reforms in Foreign Direct Investment (FDI). The FDI reform initiatives had started since 1991 as foundation of Indian economy and the governments over the period contributed to emerge India as destination for Foreign Direct Investment in the world. These reforms played an important role in capital formation in stock markets and developments in the economy. This paper attempts to study the impact of second-generation economic reforms in FDI and its impact on Stock Market Development (SMD) in India. This paper uses a multivariate unrestricted VAR (Vector Autoregression) model to investigate the impact of the reforms in FDI on the development of stock market in India. The study used the quarterly data of FDI inflow, exchange rates and terms of trade (Exports/Imports) from 2004 to 2017 to find the long run impact of FDI reforms on the SMD. The SMD is the ratio of stock market capitalization to the Gross Domestic Product (GDP) of the country. The study uses the unrestricted VAR to generate impulse responses to find the impact of one standard deviation innovation change in one variable on other. Further, Unit Root Test, Granger causality test statistics and variance decomposition (VDC) respectively have been applied to identify variables stationarity, the causality and percent change in variance due to one standard deviation innovation in other variable. The findings of the study conclude that there were structural breaks in the data during 2007Q1 and 2011Q1 due to US financial crisis that lead to high volatility in the Indian stock market. Further, finding concluded that there is a bidirectional causality between foreign direct investment and the stock market development. Finally, study revealed that FDI and terms of trade are also having a bidirectional causality where shock in terms of trade brings a change of 25.15 percent in FDI inflows

On the linkage between stock market development and economic growth in emerging market economies

2015 ◽  
Vol 14 (4) ◽  
pp. 363-381 ◽  
Author(s):  
Pramod Kumar Naik ◽  
Puja Padhi
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Emerging Economies ◽  
Emerging Market ◽  
Market Development ◽  
Data Series ◽  
Annual Data ◽  
Content Type ◽  
Stock Market Development ◽  
The Impact

Purpose – The purpose of this study is to empirically examine the impact of stock market development on the economic growth for a panel of 27 emerging economies using annual data over the period from 1995 to 2012. Design/methodology/approach – A second-generation panel unit root test developed by Pesaran (2007) has been used to test the stationary properties of the data series. To achieve the study objectives and to mitigate the endogeneity problem that exists in the given model, the authors use a dynamic panel “system GMM” estimator. The authors also use a heterogeneous panel causality test proposed by Dumitrescu and Hurlin (2012) to examine the direction of causality among the variables. Findings – The empirical findings indicate that stock market development significantly contributes to economic growth. Further, a unidirectional causality running from stock market development to economic growth has been found. This finding is consistent with the supply-leading hypothesis. Besides stock market development, it is also evident that macroeconomic variables, such as investment ratio, trade openness and exchange rates, have significant impact on economic growth. Research limitations/implications – The findings suggest that a well-functioning stock market, a more globalized economy and increasing aggregate investment can potentially foster the economic growth in those emerging economies. Originality/value – Unlike other studies, this study constructs three alternate composite indices along with the individual indicators of stock market development and applies robust panel econometric techniques to establish more reliable results.

scholarly journals The impact of stock market on enterprise capital structure in ASEAN developing countries

2021 ◽  
Vol 5 (1) ◽  
pp. 1359-1367
Author(s):  
Thuan Nguyen ◽  
Loc Tram ◽  
Nguyễn Thanh Liêm
Keyword(s):  
Developing Countries ◽  
Stock Market ◽  
Capital Structure ◽  
Statistical Significance ◽  
Market Development ◽  
Stock Market Development ◽  
Market Capitalization ◽  
Negative Effect ◽  
The Impact ◽  
Stock Market Capitalization

Capital structure is one of the topics in which business managers as well as academics are always interested, because it has many important implications. This problem in developing countries is even more relevant due to the low level of financial development in these countries, leading to uncertain access to external capital by firms. This paper focuses on the impact of stock market development on capital structure in five developing countries in ASEAN, namely Indonesia, Malaysia, Philippines, Thailand and Vietnam, for the period 2010 - 2018. Stock market development is measured in four different ways: Stock market capitalization to GDP (MACAP), total value of shares traded to GDP (LIQ1), total value of shares traded to stock market capitalization (LIQ2) and average of the three indexes (STOCK). The results show that development of stock market has different impacts on capital structure, depending on the measures used to reflect the stock market development. Specifically, MACAP, LIQ2 and STOCK do not reach statistical significance, while LIQ1 has a negative effect. In addition, firm size (SIZE), tangible assets (TANG), growth opportunities (TOBINQ), inflation (INF) and GDP growth (GDPGR) positively affect capital structure; while firms' profit (ROA) has negative effect. Based on the research findings, the research offers several implications for relevant stakeholders.

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